Micron posted a record Q2 as DRAM demand increases, but its CEO says this is just the beginning as more memory is required for AI to reach its full capabilities.
Micron CEO Sees Demand For Faster Memory To Increase Massively For AI To Reach Its Full Potential
Memory & Storage maker, Micron, has seen exceptional growth across all of its businesses, which include DRAM, NAND, and HBM. The growth comes from skyrocketing demand for their products as the Agentic AI craze continues to lift off every memory and storage firm.
During a conversation with CNBC, Micron's CEO said that what we are seeing right now in the AI industry is just the beginning, terming it as the "First Innings". As AI companies scale up their compute, faster and higher-density memory will become a vital component to keep the AI wheel running.
AI is in very early innings; you just saw at GTC how much advances are being made in AI. And memory is a strategic asset; you need more memory, you need faster performance memory in order for AI to be able to deliver its full capabilities.
This is inference inflection. As inference broadens, it will scale up the need for tokens, and those tokens need to be fast, and guess what, you need more memory, you need faster memory in order to deliver the full potential of memory.
And memory today is very tight supply, and supply cannot be brought up that easily, and you are seeing that in our results.
Sanjay Mehrotra - Micron Chairman, President and CEO
To make AI models run faster and to increase the token generation speed, more compute is required, and memory is essential to compute. AI GPUs demand HBM, AI CPUs demand DRAM, and guess what, all of that is short in supply. It's not a matter of demand or pricing; it's a matter of supply that major firms are not able to address, and given the future outlook, things aren't going to get any better.
GPUs are aggressively aiming to add newer and denser HBM standards. Upcoming lineups such as Vera Rubin and MI400 with HBM4 support will not just speed up the bandwidth; they are also set to max out the capacities, setting the standard for next-gen HBM solutions. DRAM, on the other hand, is rising at an accelerated pace with demand outpacing supply due to the increase in Agentic AI workloads that are pushing CPUs to increase memory support to 400 GBs. LPDDR has become the new favorite of the AI era as its power-efficiency profile make them perfect for massive scale-up deployments.
Micron set new records across revenue, gross margin, EPS, and free cash flow in fiscal Q2, driven by a strong demand environment, tight industry supply, and our strong execution, and we expect significant records again in fiscal Q3,” said Sanjay Mehrotra, Chairman, President and CEO of Micron Technology. “In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand.
As per the latest trajectory, the AI Demand for DRAM and NAND is expected to exceed 50% of the total industry TAM this year. Once again, Micron points out that Traditional and AI server demand remains robust, but is constrained due to a lack of DRAM and NAND supply. The DRAM demand will continue to increase with the influx of refreshed and newer platforms.
Micron is supplying HBM4 36GB (12-Hi) DRAM for NVIDIA's Vera Rubin platform, and is expecting to hit mature yields on existing HBM3 processes. The company is also developing its next-gen HBM4E HBM memory, which is expected to ramp next year. On the LPDDR front, the company recently unveiled its 256 GB SOCAMM2 memory with LPDDR5X modules that offers up to 2 TB capacities, and is also supplying the Groq 3 LPX from NVIDIA with DDR5 memory. The Groq LPU offers up to 12 TB capacity per chip.
On the consumer front, Micron expects PC and Mobile units to decline in the low double digits due to constrained supply and higher prices. The company also highlights that 32 GB has become the choice of PCs that are running Agentic AI workflows locally.
About the author: A Software Engineer by training and a PC enthusiast by passion, Hassan Mujtaba serves as Wccftech's Senior Editor for hardware section. With years of experience in the industry, he specializes in deep-dive technical analysis of next-generation CPU and GPU architectures, motherboards, and cooling solutions. His work involves not only breaking news on upcoming technologies but also extensive hands-on reviews and benchmarking.
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